ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 32: Business Strategy (574)

Submission date 13/10/2020 Date received (1st submission)

Re-submission date Date received (2nd submission)

Student name Le Duc Huy Student ID GBD18452

Class GBD0704 Assessor name BADR BADRAOUI

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand
that making a false declaration is a form of malpractice.

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Table Of Content
I. Introduction ....................................................................................................................................... 4

II. Indentify The Strategic Capabilities Of The Vietnam Airline .............................................................. 4

1. DEFINITION AND THE KEY COMPONENTS OF STRATEGY CAPABILITIES ............................................. 4

1.1. Definition ....................................................................................................................................... 4

1.2. The key components of strategies capabilities .............................................................................. 4

2. EXPLAIN THE RESOURCES-BASED VIEW (RBV) ................................................................................... 5

3. INDENTIFY THE STRATEGIC CAPABILITIES OF Vietnam Airline ........................................................... 6

3.1. Benchmarking ................................................................................................................................ 6

3.2. The Value Chain and The Value System ......................................................................................... 6

➢ A value chain .....................................................................................................................................6

➢ Values system. .................................................................................................................................11

4. ANALYSIS STRATEGIC CAPABILITIES BY USING VRIN/VRIO FRAMEWORK ....................................... 12

III. SWOT of Vietnam Airlime ............................................................................................................ 15

Conclusion .............................................................................................................................................. 16

References: ............................................................................................................................................. 17

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 I. Introduction

In task 1, the study mentioned and explained the external environmental impacts and effects on Vietnam
Airline and the market strategies of Vietnam Airline. Task 2, research will explain the internal environment
impacts and effects on the Vietnam Airline's business plan by assessing resources and skills using
acceptable methods.

II. Indentify The Strategic Capabilities Of The Vietnam Airline

1. DEFINITION AND THE KEY COMPONENTS OF STRATEGY CAPABILITIES
1.1. Definition

Strategic capability to a business' ability to harness all its skills, capabilities and resources in order to gain
competitive advantage, and thus survive and increase its value over time. While strategic capability does
take into account the strategies a business uses, it focuses on the organization's assets, resources and
market position, projecting how well it will be able to employ strategies in the future. There is no single
method or universal metric for measuring or noting strategic capability. ( Dennis Hartman, 2019 )

1.2. The key components of strategies capabilities

There are two components of strategic capabilities: resources and competences. Resources are the assets
that organizations have or can call upon. Competences are the ways those assets are used or deployed
effectively. To obtain long-term success these strategic capabilities cannot be static. A concept called
dynamic capabilities suggest that an organization's ability to renew and recreate its strategic capabilities
to meet needs of changing environments in order to be effective over time. For new entrants in a market,
threshold capabilities are needed to meet neccessary requrements to compete in a given market and
achieve parity with competitors in that market.

Resource Competences
Machines, buildings, raw materials, Physical Ways of achieve utilisation of plant,
products, patents, data bases, computer efficiency, productivity, flexibility,
systems marketing
Balance sheet, cash flow, suppliers of funds Financial Ability to raise funds and manage cash flow,
debtors, creditors etc.
Managers employees, partners, suppliers, Human How people gain and use experience, skills,
customers knowledge, build relationship, motivate
others and innovate
Table 1: Resources and capabilities

The resources and threshold capabilities and capabilities can help the business to achieve outstanding
strategic advantage and efficiency. Resources and capabilities are all companies that want to meet the

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criteria necessary to be successful in a defined market and compete with competitors in that field. Without
it, over time, the company would not have survived. Threshold adjustment service may be provided to
meet minimum customer criteria (Garry Johnson, 2017). With a 70% stake in Vietnam Airlines and Jetstar
as one house, Jetstar can only be considered as the low-cost segment of Vietnam Airlines. As a result, the
current game is just a race between the two giants Vietnam Airlines (VNA) and Vietjet Air (VJ), plus a
"disruptor" Bamboo Airways (BB) insists on "share".

The match between VNA and VJ is a match between two opposing schools. VNA costs high but invests
heavily in services. Meanwhile, VJ accepts to reduce service quality and use cheap tricks to attract
customers.

With a larger scale, VNA's revenue is also nearly double that of VJ, but the profit before tax of both
companies is approximately the same, showing that both strategies of the two firms bring certain effects.

Identifying and maintaining threshold resources and capacities is a major challenge as threshold levels
change as critical performance factors change or when competitors and newcomers enter the operation.
their business (Garry Johnson, 2017). Currently, Vietnam Airline is a national airline and is known by many
people and occupies a lot of market share in domestic aviation when Vietnam Airlines invests in research
and development with skilled engineers (human resources). Top and top will help the company ultimately
offer experiences that help solve major problems in advertising and in other areas providing itself with a
competitive advantage or the basis for outstanding performance.

2. EXPLAIN THE RESOURCES-BASED VIEW (RBV)

The resource-based view holds that in order to achieve and maintain a competitive advantage, corporate
resources play a very important role. A company will be successful if it equips the resources that are best
suited to the business and its strategy. Resource-Based Perspectives - The RBV not only focuses on
analyzing internal resources, but it also links the internal capacity with the external environment.
Competitive advantage will be attracted to the business that possesses the best resources or
competencies. Therefore, according to RBV, competitive advantage is related to the development and
exploitation of the company's core resources. (Vietnambiz.vn, 2019) Unlike physical resources, brand
equity has been developed. for a long time and something that other companies cannot buy from the
market. The two important assumptions of RBV are that resources must also be heterogeneous and non-
uniform. According to RBV, not all corporate resources are strategic resources. Competitive advantage
only occurs when there is heterogeneity in resources (different resources between enterprises) and
resource immobility (competing firms are unable to obtain resources from other businesses).

Heterogeneous: The first assumption is that skills, capabilities and other resources that organization
possess differ from one company to another. If this organization would have the same amount and mix of
resources, they could not employ different strategies to outcompete each other. What one company
would do, the other could simply follow and no competitive advantage could be achieved. This is the
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scenario of perfect competition, yet real world markets are far from perfectly competitive and some
companies, which are exposed to the same external and competitive forces (same external conditions),
are able to implement different strategies and outperform each other. Therefore, RBV assumes that
companies achieve competitive advantage by using their different bundles of resources. (Ovidijus
Jurevicius, 2013)

Immobile: The second assumption of RBV is that resources are not mobile and do not move from company
to company, at least in short-run. Due to this immobility, companies cannot replicate rivals' resources and
implement the same strategies. Intangible resources, such as brand equity, processes, knowledge or
intellectual property are usually immobile. (Ovidijus Jurevicius, 2013)

3. INDENTIFY THE STRATEGIC CAPABILITIES OF Vietnam Airline

3.1. Benchmarking

Criteria Vietnam Airline Bamboo Airway Vietjet Air Jetstart

Brand value High Medium High High
Supply chain network Strong Medium Strong Medium
Quality Good quality Normal quality Good quality Good quality
Product Provide domestic Provide domestic Provide domestic Provide
and foreign flights and foreign and foreign domestic and
flights flights foreign flights
Innovating to change High Medium High Medium
customers desires
Staff 20.000 1.500 2.000 1.500
Vietnam Airline's Benchmarking

Table Vietnam Airline's Benchmarking shows the Vietnam Airline Benchmark, showing the process of
measuring the performance of a product or service of Vietnam Airline and based on that to analyze and
compare with other competitors. Vietjet Air, Bamboo Airway and Jetstar are the three major competitors
and well-known airlines in the country. From the above comparison, Vietnam Airline can draw out the
factors that can be improved and developed.

3.2. The Value Chain and The Value System

➢ A value chain is a business model that fully describes the activities required to create a product service.
For companies that produce goods, the value chain includes the steps involved in bringing a product
from the creation to distribution and everything in between - such as purchasing raw materials,
exporting, and marketing activities. ( Carla Tardi, 2020 )

A company conducts value chain analysis by evaluating detailed procedures related to each of its business
steps. The purpose of value chain analysis is to increase production efficiency so that a company can
deliver maximum value at the lowest possible cost. Due to increasing competition in price, product offering

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and customer loyalty, companies must constantly check the value they create to maintain their
competitive advantage. Value chains can help a company discover its underperforming business areas and
then implement strategies that will optimize processes for maximum efficiency and profitability. ( Carla
Tardi, 2020 )

The value chain ( Course: strategicsourceror.com )

Inbound Logistics

Inland logistics is concerned with the receipt, storage, inventory control and scheduling (Porter, 1998). In
the aviation industry in general and Vietnam Airline in particular, have worked to create success. These
include aircraft manufacturers, food service companies, airports, local transportation services, fuel
companies, aircraft rental companies and labor federations. In the event of an issue with the ability to
access, supply and store items from any of the above companies, the Vietnam Airline may be damaged.

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The efficiency of all companies, with regard to the proper provision and storage of each other, ensures the
sustainable Vietnam Airline generates maximum profits. If the fuel companies are unable to fuel the
aircraft on time, it means the aircraft cannot operate.

Operations

This has to do with everything related to equipment maintenance, assembly, packaging, testing and
everything else that turns the input into the end product (Porter, 1998). These include maintenance of the
aircraft and ongoing repairs as well as replacement of worn out parts. Effective operations are required in
the aviation industry. It must be efficient and technologically superior. Vietnam Airlines hires specific
companies to assemble their equipment and monitor them for maintenance purposes. These must be
specialized companies to ensure the efficiency and safety of airlines. They must coordinate, control, and
manage their repair work worldwide. This is not only for the equipment, but also for airport service,
runway and service training for workers. This form of management keeps the performance of Vietnam
Airlines very high. These activities are mainly activities that prepare people to convert raw materials into
the final product.

Outbound Logistics

These are the actions that must be performed to allow the finished product to reach the customer (Porter,
1998). For Vietnam Airline, these services include services such as ensuring that customers who purchase
tickets on the phone or on the internet receive them, and guarantee transportation for customers who
land from the airport home. and distribute branches of the same airline evenly around the world to make
customers' lives easier. This also includes warehousing. Furthermore, it includes the receipt of goods or
customers, verifying the legality of goods and customers, and verifying, storing and tracing goods as
needed in the future.

Marketing and sales

These are activities that Vietnam Airline takes to ensure that customers will use their services. These
include factors such as product promotion, retail management, small-scale customer transactions and
channel selection (Porter, 1998). Marketing and sales also include pricing and selling goods through
advertising. The development of the Internet as a major distribution channel for airline services has
brought many benefits. A lot of tickets are sold through direct online sales. The airline companies also have
a lot of online marketing for their services. These ads are highly effective because when a person logs into
other sites on the internet, these ads will pop up on the screen.

With the advantage of being a national airline, building the image of Vietnam Airlines is also different from
other low-cost airlines. Vietnam Airlines with women in ao dai and men in yellow-green gilts in elegant
colors, creating a friendliness for customers, even foreigners, when looking at something "very
Vietnamese". Doing so shows that the Marketing strategy of Vietnam Airlines has a vision when positioning

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itself as a premium airline, with quality and service carefully taken care of These advertisements can satisfy
many potential customers. power. Selling tickets online has certainly helped Vietnam Airline significantly
reduce distribution costs. Customers can also compare products and fares from different airlines and
Vietnam Airline. Customers can even rate the airline's safety and their punctual reputation via the internet.
Such strategies help promote products and many people choose to use air as their preferred means of
transportation.

Vietnam Airlines' distribution channel is also very focused on applying technologies to its ticketing process
in order to provide the best experience to its customers. The company opened for sale on the Website
with the easiest interface and way to buy tickets for customers. In addition, the airline also links with
famous travel websites with millions of users such as Traveloka or Booking to give customers easy access
to their flights, as well as buy tickets in the easiest way.

Service

These are activities aimed at enhancing the value of a product or service, supporting customers, repairing
services, installing new options, training in-service, managing spare parts and upgrading existing systems.
Current technology level. elsewhere (Porter, 1998). Vietnam Airline is making considerable efforts to
uphold their standards. System upgrades begin with the internet upgrade to the latest available
applications. These include buying tickets online, keeping records of tickets sold online, and
communicating appropriately with customers to enable the organization to effectively meet all its needs.
Vietnam Airline is known as an airline with very good service quality such as well-cared meals or large and
fuel-efficient airplanes such as Airbus A350 and Boeing 787- 9. There are also upgrades of equipment used
in flying. A lot of innovations are appearing every day and Vietnam Airline is working hard to have the
latest technology possible. In 2019, the event marks the first time in the history of Vietnam Airlines' fleet
of 100 aircraft operating, affirming the leading position of Vietnam Airlines with the largest and newest
fleet of aircraft. the most modern in Vietnam and of regional stature.

Customer support helps customers get exactly the service they are aiming for. Vietnam Airline employs
customer service providers who are on the phone and online to answer all customers' questions. Vietnam
Airlines also incorporates training for their staff on site whenever they introduce some form of new
machinery or technology. This increases the efficiency of the aviation industry (Hitt, 2010). Pilots,
technicians, flight attendants, office assistants and mechanics are continuously trained to keep up with
the advancements in technology.

Procurement

Procurement involves the purchase of raw materials, service providers, spare parts, machinery and
buildings. Raw materials are purchased when it is planned to use them. This ensures that all that is
purchased is industry-relevant and that waste is minimal (Porter, 1998). Spare parts purchased by Vietnam
Airline must be compatible with the aircraft they have. These are better bought when the market price is
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quite affordable. People working in Vietnam Airline must be fully trained experts in the field in which they
are working; This is even more so for pilots. Vietnam Airline cannot gamble with pilots, they have to ensure
that all of their pilots are highly trained to ensure their safety and punctuality. The aircraft handling
technicians also have to go through rigorous training to avoid plane crashes. Restaurant buildings are not
located at strategic points. Vietnam Airline has set up headquarters and major airline buildings in Ho Chi
Minh City, and Hanoi are the two major cities of Vietnam. These places have to be easily accessible so that
when the plane lands or takes off, they have enough airspace to do it. This is because the majority of urban
areas have skyscrapers.

Research and development

In the airline industry, must constantly research new things to ensure the development of the industry.
This is also done to ensure industry continuity and keep customers interested in their services (Grant,
2010). Research also leads to growth as Vietnam Airline offers faster and easier ways to operate. With
Vietnam Airline, they operate on the basis of customer satisfaction and service and flight satisfaction. They
don't go cheap and instead they put customer experience and passenger safety to the highest level.

Human resources management

This deals with everything related to recruiting, retaining, and paying employees and managers. Without
the staff to operate the machines, Vietnam Airline could not operate effectively. Recruiting, remunerating
and retaining employees are extremely important aspects of ensuring maximum production of goods and
services. Therefore, Vietnam Airline works extremely hard to satisfy employees and customers. At Vietnam
Airline, a specific bonus for each employee is not declared by the national airline. At Vietnam Airlines, this
bonus fund of 156 billion will be divided according to the current salary of employees. This means that the
positions with high salaries such as pilots and managers will have higher than average bonuses. The
average salary of Vietnam Airlines pilots is at more than 150 million / month and the person with the
highest salary can double this number, or 300 million VND / month. Meanwhile, the average salary of flight
attendants is about 30 million / month. It can be seen that Vietnam Airline is very willing to pay bonuses
to its employees and the salary they pay to pilots is also very high

Planning and management within an organization can also have a huge impact. Vietnam Airline ensures
that legitimacy, finance, accounting and public affairs are all properly managed to ensure productivity
(Hitt, 2010). Proper planning and management lead to profitability in an organization.

Profit Pools

These are all profits from the value chain of Vietnam Airline at all points. To survive and generate profits
in difficult environments, airlines use three main variables: cost, calculated by dividing the total operating
costs by ASM (available seat miles); productivity, this is calculated by dividing the total operating cost by

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the RPM (passenger sales miles); and the load factor, calculated from the ratio between ASM and RPM
and used as a measure of power usage.

Vietnam Airline has the ability to make big profits and maintain them. This is because they have devised a
strategy to be able to do so. They possess the latest technology, machines and manpower. Employee skills
and attitude ensure service quality and long-term profitability (Sekhar, 2009). The company's designs are
also extremely attractive and this helps them retain customers. For example, the aircraft is spacious,
comfortable and offers drinks when a single trip causes many customers to return. This allows them to
maximize profits. According to the Vietnam Airlines Corporation (Vietnam Airlines), the corporation's total
consolidated revenue and pre-tax profit in 2019 was the highest ever, estimated at 101,188 billion dong
(an increase of more than 2,200 billion dong). . with 2018) and nearly 3,369 billion dong profit. In which,
the total consolidated revenue and pre-tax profit in 2019 were the highest ever, estimated at 101,188
billion dong (up more than 2,200 billion dong compared to 2018) and profit was nearly 3,369 billion dong.
In which, the parent company is estimated at more than 75,000 billion dong in revenue and over 2,700
billion dong in pre-tax profit, up 12% over the same period. Notably, the total (consolidated) budgetary
payments reached VND 7,369 billion, an increase of 10% compared to 2018, of which the parent company's
budget remittances were VND 2,573 billion, an increase of 43% over the same period. period.

With effective business results, most of Vietnam Airlines' financial indicators have significantly improved,
improving capital autonomy and financial security. The rate of return after tax / owner's equity (ROE)
reached over 16%, while the ratio of liabilities / equity decreased to 2.27 times.

They have the advantage of speed, which makes them extremely convenient for their customers. This also
causes them to make huge profits and maintain them. The majority of airlines are like alliances. This is
because at airports, their offices are usually located next to each other and they also share the same
runway at airports. This helps them share ideas

➢ Values system refers to the order and priority that an individual or society places on moral and
ideological values.

Although two individuals or groups may share a common set of values, they may not have the same weight
or priority over those values. Two individuals or groups are said to have different value systems, although
they may have more than one common value, if their preference for different values or if there are
different exceptions. then they are associated with these values. Groups and individuals that share many
values can still lead to conflict, ideological or physical, with each other, because of differences in their
value systems. Therefore, people with different value systems will disagree on the true or false of some
actions, both in abstract and concrete cases. In essence, a value system (if fully defined) is a formalization
of the code of conduct.

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The premise behind the discipline closely examining value systems and their differences (with the
provisional designation) is an understanding of these differences in prioritizing values that can lead to
understanding more politically (and motivated) by individuals and groups.

Customer Value Chain: Vietnam Airline creates value by using its services to create satisfaction and deliver
the best customer experience. Vietnam Airline also offers loyal customers policies such as golden lotus
incentives to enjoy many benefits when being a VIP member. Over the years, Vietnam Airline has brought
customers their best services and brought customers trust and safety. However, today's airlines are
developing very strongly, so it is required that Vietnam Airline increasingly develop new technologies and
better services to serve customers.

4. ANALYSIS STRATEGIC CAPABILITIES BY USING VRIN/VRIO FRAMEWORK

The VRIO framework is a tool used to analyze a company's internal resources and capabilities to find out
if they can be a source of sustainable competitive advantage. To understand the source of competitive
advantage, companies are using many external (Porter's 5 Forces, PEST analysis) and internal (Value Chain
Analysis, BCG Matrix) tools. One of the company's internal resource analysis tools is a VRIO analysis. This
tool was originally developed by Barney, JB (1991) in 'Enterprise resources and sustainable competitive
advantage', in which the author defines four attributes that enterprise resources must have. sustainable
competitive advantage. According to him, that resource must be something precious, rare, irreplaceable
and irreplaceable. His original framework is called VRIN. In 1995, in the work "Seeking competitive
advantage" later, Barney introduced the VRIO framework, this is a development step of the VRIN model.
VRIO analysis stands for four questions that ask whether the resource is worth it? rare? expensive to
imitate? And is a company organized to capture the value of its resources? Resources or the ability to meet
all four requirements can provide a company with a sustainable competitive advantage. ( Ovidijus
Jurevicius, 2013 )

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VRIO framework ( source: managementmania.com)

In practice, the VRIO analysis is also used in combination with other analytical techniques to help
organizational management evaluate business resources in a more detailed view. For financial resources,
there are many detailed financial indicators that evaluate the financial condition or performance of the
business from different perspectives. Likewise, human resources, property or information are other
detailed indicators of their performance, efficiency or quality. The advantage of a VRIO analysis is its
simplicity and clarity.

VRIO Analysis of Vietnam Airline

Resource Valuable Rare Inimitable Organized Result

to Exploit

1. In-Flight YES YES NO Yes Unused Competitive

Entertainment advantage
2. Assigned Seating YES YES NO Yes Unused Competitive
advantage
3. The Customer Bill YES YES NO Yes Unused Competitive
of Rights advantage
4.Platinum platform Yes NO NO Yes Competitive Equality/ Parity

5.Strong Finacial Yes No No Yes Temporary competitive

Base advantage
6.Human Resource Yes No Yes Yes Unused Competitive
management advantage

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 7.Strong Brand Yes Yes Yes Yes Long-term competitive
Name advantage
8.Great Airport Yes Yes No No Temporary competitive
Location advantage

V-Valuable

Faced with concerns about the hot development of the market affecting flight safety due to the poor
quality of training or the quality of supervision and management, Mr. Duong Tri Thanh, General Director
of Vietnam Airlines said, the airline always kept stick to the principle of safety at number 1 and don't trade
it for anything. “Despite always having to cut costs in the context of fierce competition, Vietnam Airlines
still makes a worthy investment in using reputable international agencies to participate in assessment,
search and recovery. weaknesses in the safety management system, especially safety culture and human
consciousness. The first thing I do at the beginning of the day is to read the safety report.

In 2019, the revenue of Vietnam Airlines Corporation (Vietnam Airlines) reached the most impressive
number ever with 101,188 billion VND (an increase of more than 2,200 billion VND compared to 2018),
pre-tax profit reached 3,369 billion VND.

R-Rarity

As is known, Vietnam Airline is currently a national airline of Vietnam and is also known as the airline that
makes a difference thanks to the accompanying services. For example, to overcome those who are too
large or too tall, Vietnam Airline has developed a large-compartment A350 or Boeing 787 with large seats
to overcome that problem. One more thing, now with standard carry-on baggage of 7kg and carry-out is
20kg of all airlines, Vietnam Airline continues to put customer experience first when increasing the number
of kg of carry-on luggage. 12kg and carry is 23-32kg depending on the class.

I-Imitability

Currently, the name of Vietnam Airline is something young airlines want. Vietnam Airline is considered as
a national airline known by many people with its name and network coverage nationwide and is the airline
that contributes to many international airports. And Vietnam Airline has been shaped in the hearts of
passengers as the best airline service in Vietnam. Vietnam Airline has also seen an increase in the number
of employees, and with its unique and innovative management style, Vietnam Airline is able to
continuously create the best services, making it extremely difficult for competitors compete.

O-Optimization

Flight scheduling is the starting point for all other optimization problems for Vietnam Airline and is the
important operational planning task faced by an airline. Following network design and scheduling, an

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aircraft type must be assigned to each flight segment in the itinerary. In addition, a pre-seat selection
service gives passengers a choice of comfortable seats in advance or to choose the most suitable seats for
the whole family. In addition, in the current 4.0 era to optimize the customer experience, Vietnam Airline
also supports online booking to save time for customers.

III. SWOT of Vietnam Airlime

In mission 1, the Report has listed the opportunities and challenges of Vietnam Airline in the airline market.
In exercise 2, I will clarify the remaining SWOT analysis element, which is strong point S and weakness W.
Strengths and Weaknesses represent the internal factors of the firm.

SWOT Analysis ( wordstream.com )

Strength: It can be said that the strongest point of Vietnam airlines is the government's backing with a
nationwide and worldwide flight network. Large financial scale + modern and diversified aircraft fleet gives
Vietnam airlines strong image and reliability. Vietnam airlines have been known by the people across the
country for decades, so they have been chosen by customers without having to advertise much. Vietnam
airlines are an official member of the Skyteam airline alliance, so the international route network will be
wider.

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Another strength of Vietnam is the support of the ground system, airport, logistics, petroleum, and
warehouse, so its competitiveness is very high compared to Jetstar. Airplanes at factories A75, A76 have
been increasingly improved in quality, capable of maintaining modern airplanes. Another strength of
Vietnam is the support of ground systems, airports, logistics, and gasoline. Oil, warehouse so the
competitiveness is very high. The information technology system is very advanced in terms of security and
convenience, not through the company or via email, which will save a lot of time. This system allows
Vietnam Airline to develop numerous agents without fear of losing control. Provide insurance services for
customers traveling to any destination of Vietnam Airline. Enjoy your flight with peace of mind. With a
reasonable fee from visitors, you will have complete peace of mind for unexpected situations with practical
benefits. Strong brands are well known. Professional, enthusiastic and attentive staff. Fast shipping time,
fast turnaround time. Occupying a large share of the domestic aviation market. It can be said that the
strongest point of Vietnam airlines is the government's backing with a nationwide and worldwide flight
network. Large financial scale + modern and diversified aircraft fleet gives Vietnam airlines strong image
and reliability. Vietnam airlines have been known by the people across the country for decades, so they
have been chosen by customers without having to advertise much. Vietnam airlines are an official member
of the Skyteam airline alliance, so the international route network will be wider.

Another strong point Vietnam Airline is a big brand with a long experience management team. Professional
human resource training system.

Weaknesses (W): Vietnam airlines: State management mechanism can lead to slow and dependent
decision-making. The level of operational flexibility will certainly not be high. The international flight
network is too few, especially long flights compared to other major regional airlines. Not creating a major
transit point for major international airports in Vietnam like other countries in the region. The fare of
Vietnam airlines is too high. Not only on domestic routes, on international routes, the fare of Vietnam
Airlines is also higher than many regional airlines. The same flight route Hanoi - Kuala Lumpur, but the fare
of Vietnam Airlines is 20 USD higher than Malaysia Airlines (420 USD compared to 400 USD, round-trip
within 14 days). In the Hanoi - Guangzhou sector, if traveling on a Vietnam Airlines flight, passengers will
have to pay 308 USD / round trip ticket (within 45 days) but on the same flight, Phuong Nam Airlines
(China) only sells with price 298 USD / ticket. In addition, the transfer rate is low, the fleet size is still
inferior to the competitors in the region. The reason for IT infrastructure and technological capacity of
employees is still low.

Conclusion
Finally, I discussed in exercise 2 how the impact of the internal environment affects the Vietnam Airline.
And using two approaches to Benchmarking and Value Chain and Value System approaches to clearly
define a company's strategic capabilities. In addition, the VRIO model is often used to test and evaluate
which strategic strengths are the basis for achieving competitive advantage and point out weaknesses that
help Vietnam Airline optimize them and develop more.

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